Ether derivatives netflow falls to lowest in 18 months – Why is this bullish?

The amount of Ether being taken off crypto derivatives exchanges has reached the highest level since August 2023 — a signal analysts interpret as positive for Ether's price.

On Feb. 6, Ether (ETH $2,730) net flows on crypto derivatives exchanges stood at negative 300,000 ETH, representing approximately $817.2 million worth of outflows, with ETH trading at $2,724 at the time of publication.

The Ether net flows on crypto derivatives stood at -300,000 ETH. Source: CryptoQuant

CryptoQuant contributor Amr Taha said in a Feb. 6 analyst note that it’s a bullish signal as traders pulling their Ether off derivatives exchange — which involve contracts between a buyer and a seller to trade an asset at a pre-agreed price on a specific date — means reduced selling pressure, along with closing leverage positions and potentially moving ETH to cold storage.

Taha said the increase in Ether being taken off derivatives exchanges reduces “the immediate supply available for selling,” which makes it harder for Ether’s price to drop. 

ETH is down 19.42% over the past 30 days, having now traded below the psychologically important $3,000 price level since Feb. 3.

Ether is trading at $2,720 at the time of publication. Source: CoinMarketCap

“If demand remains stable or increases, price tends to rise due to lower available supply,” Taha added.

Crypto commentator Kyle Doops said in a Feb. 6 X post, “Big moves like this typically mean less selling pressure and major position closures — often a bullish signal.”

It comes just days after US President Donald Trump’s son, Eric Trump, posted to X that “it’s a great time to add ETH.”

This follows growing bullish catalysts for Ether, including the potential launch of a staked Ether exchange-traded fund and Donald Trump’s World Liberty Financial crypto project continuing to increase its Ether holdings.

Consensys founder Joe Lubin recently told Cointelegraph that ETF issuers are hopeful that funds offering to stake could soon be given the regulatory go-ahead.

“We’ve been in discussions with the ETF providers, and they’re already working hard on that, so they expect that to be greenlit reasonably soon,” Lubin said.